Why Captain D’s Was Thrown Overboard To Save Del Taco

This week’s restaurant-chain selloffs stand out from the recent steady stream of deals that have seen many well-known names change hands, including Carl’s Jr., Hardee’s, On the Border, and Papa Murphy’s. In private firm Saggitarius Brands‘ sale Wednesday of its two brands — southern fish ‘n’ chips chain Captain D’s and fast-Mexican icon Del Taco – the company essentially sacrificed one brand to save the other.

With both chains in debt and struggling, 550-unit Captain D’s was sold off for an undisclosed sum to major industry player Sun Capital Partners, while 515-unit Del Taco was recapitalized with a new $160 million term loan and $39 million in revolving credit. The newly formed Del Taco owner, known as Del Taco Holdings, also got an equity infusion of undisclosed size from Goldman Sachs Mezzanine Partners, with participation from existing investors Charlesbank Capital Partners and Leonard Green & Partners.

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